Options Mania and Real-World Risk Mean Volatility Here to Stay
- Overheated derivatives market is fueling big swings in stocks
- Macroeconomic calendar is adding to outlook for volatility
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Job losses persist. The global economic recovery from Covid-19 remains tenuous. The U.S. presidential election is less than two months away, Congress seems unable to agree on additional stimulus and Brexit is once again facing roadblocks.
Any of those macroeconomic risks by themselves would be enough to make investors antsy. But add in the extremely active options market that’s taken hold in 2020, and stock buyers have reason to be concerned that a surge in volatility lies ahead.